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Medical device supply chain management is so much more than ensuring manufacturing components reach your production facility. It's also a process of timelines, inventory management, spend analysis and scouring markets for the best price — without sacrificing quality.
For medical device production, that's especially key: it's vital to produce top-quality products on time for markets around the world, while driving production costs down. It's a tough tightrope to walk, and many operations or supply chain managers worry that expanding to a global supply chain would compound those issues rather than address them.
Those fears are misplaced. Here are the top three benefits that a global supply chain can deliver.
Pricing structures fluctuate across markets — a part that costs $3 in the United States might cost $1.95 in Malaysia. That difference compounds dramatically at scale. With a global supply chain, you can compare prices from vendors around the world to ensure that you're purchasing from the cheapest location.
It's important to note that the price difference doesn't imply a downgrade in product quality, which is crucial in medical device production. Manufacturers often sell identical products at different prices based on local competition, shipping and other market factors.
The best part? You can then translate those cost reductions into a lower price for your consumers, ensuring that your product stays competitive and attractive.
Worried that the cost of shipping would derail the benefits of a global supply chain? In some cases, global shipping costs may cause a less expensive product to be just as costly as a local vendor. But the majority of the time, buying supplies from a lower cost market is still less expensive overall, even when accounting for shipping costs. For instance, buying 200 pieces at $1.95 from Malaysia and paying $25 shipping is still less than buying 200 at $3.00 locally.
The key here is that a global supply chain expands your options when sourcing your products. You can assess from a far wider pool of vendors and determine whether your best option is in fact a supplier halfway around the world.
Lead time is always a major concern in medical device supply chains. Global shipping transit time is a significant hurdle to overcome, but you can start to combat longer shipping time with proactive planning. The bottom line is that a global supply chain naturally comes with longer shipping times, potentially multiple weeks at a time.
However, that doesn't have to be a deterrent. A properly managed supply chain builds lead time into planning. In fact, there's a simple solution: planning ahead.
To run a global supply chain for your medical device production, you'll need to build your inventory and manage your supply chain diligently — just as with any other manufactured device. That means counting backward from when your devices need to reach end-users to account for final shipping, building timelines and ordering components to calculate your lead time. Software like an ERP or inventory management system can help with that calculating and managing that organization.
With the dramatic cost savings that you can get, something as simple and easy to solve as timelines shouldn't prevent you from globalizing your medical device supply chain.
If your medical device business is expanding, a global supply chain can be the first step toward true global production. The market knowledge and partnerships you gain via a global supply chain can facilitate moving some production overseas. That expansion can help with everything from lower labor costs to more flexible shipping to global markets from your overseas facilities.
Of course, you can't capture these benefits of a global supply chain overnight, and global manufacturing may seem far away. Expanding your medical device supply chain to include global markets pays enormous dividends, but it can be challenging to establish that chain or to keep up with the research required to find true low-cost vendors around the world.
That's where working with industry experts and global manufacturing partners comes in. Global manufacturers can leverage established supply chains and deep market knowledge to fully capture all the benefits of a global supply chain.
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